Saturday, February 16, 2019

Delivery wars intensify, but do UK consumers care?


As the UK “delivery wars” intensify between Amazon, Argos and other big name rivals, some experts have warned that they are struggling to provide a service that overestimates the needs of customers.

“Retailers continue to tell us that the future of home delivery is faster and freer… but customers value convenience and consistency,” warned LCP Consulting Retail Partner Stuart Higgins.

He pointed out that only a third of online shoppers opt to pay extra for next day delivery items. However, this kind of service is just what retailers are fighting to provide.

Amazon now offers evening deliveries on orders placed before noon; a free service to Amazon Prime subscribers. “Prime Same Day” will cover 1m items, will have no minimum order value, and is itself an extension on the one-hour delivery service which sought to challenge UK grocers by including convenience items, chilled and frozen food.

This service is currently only available in Greater London and a few areas in Hertfordshire and Berkshire, though Amazon plans to roll it out across the UK. However, rival Argos, which already has a brick and mortar presence throughout Britain, also offers a same day delivery service and, in response to Amazon, announced that it would offer a same-day delivery service for free in the run-up to Black Friday.

Other retailers have responded by building up their own delivery capabilities in order to compete on speed and price. The name of the game is making standard deliveries more convenient and consistent, whilst struggling to offer the best deal for faster options.

Higgins continued saying that Amazon is already struggling to maintain its unlimited offer for Prime members, with its free service, earlier cut off points and discount vouchers costing the company too much in light of how many customers utilise the new options.

“I don‘t think people necessarily want things now, now, now,” said Frank Proud, Found of Apex Insight.

“In the long run, there is a cost and someone has to pay it. Amazon can subsidise this but it won‘t do forever.”

However, he did note that “if anybody can grow same-day deliveries beyond the super-premium end of the market, it would be Amazon.”